It’s Redress-Day for Letting Agents

by Paul Shamplina

9:40 AM, 1st October 2014
About 4 years ago

It’s Redress-Day for Letting Agents

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It’s Redress-Day for Letting Agents

At last the Government has agreed that every letting agent in England and Wales must join an authorised consumer redress scheme to ensure tenants and leaseholders have a straightforward option to hold their agents to account. The law comes into effect from today – 1st October 2014. Paul Shamplina Landlord Action

Any agent that fails to join one of the three approved redress schemes, The Property Ombudsmen, Ombudsmen Services or The Property Redress Scheme, will face a fine of up to £5,000 from their local authority and could ultimately be closed down if they continue to breach their legal requirement to join such a scheme.

After joining, the agent must comply with the scheme’s Ombudsman decision as failure to do so may result in the agent being removed from that scheme. This may then result in the agent being unable to join another Government authorised consumer redress scheme. By joining one of the schemes, the property professional confirms they will comply with the decision of an Ombudsman if a complaint goes that far.

For years Landlord Action have been instructed by landlords to carry out debt recovery against rogue agents that have taken rent and not passed it to the landlord. Back in 2001, I remember having a conversation with a well-known property journalist, discussing this problem and the fact that letting agents were not regulated or ordered to belong to any kind of redress scheme. I’m really pleased that 13 years later, this is now finally coming into effect.

A word of warning, any landlord/tenant that is using a letting agent should always insist on seeing proof that the agent has Client Money Protection insurance in place. This means if they were to go out of business, their rent would be protected. If the agent is affiliated to the likes of ARLA, NAEA, NALS or Safe Agent, this vital insurance will be in place.

I also feel it should be compulsory for any individual or company trading in the ‘rent-to-rent’ sector of lettings (subletting with owner’s consent), to be a member of one of these redress schemes, as they too are managing a property and handling rents. As a member of the Advisory Council for The Property Redress Scheme, I intend to push for this to happen. Of course, I get to see when things go wrong and am at the receiving end of landlords’ distress when they call for help in retrieving their properties and rent. To date, they have had no redress scheme to report their complaint to.

So, I would like to praise the Government for bringing in these mandatory redress schemes, helping to raise the standards of letting agents and redress process for the consumer.

There are still about 5,000 unregulated letting agents and it will be interesting to see how councils will act and how quickly enforcement can take place if they do not join a scheme. I know to become a member of The Property Redress Scheme the terms are quite simple and cheap.

For me, the biggest challenge in the future will be ensuring that every letting agent has Client Money Protection insurance in place. When this happens, we will know we have really cracked the letting industry in terms of protection for the landlord/tenant consumer.

Contact Landlord Action

Specialists in tenant eviction and debt collection. Regulated by The Law Society.


Comments

Mandy Thomson

10:21 AM, 1st October 2014
About 4 years ago

I'm sure it's been said before, but the penalty for an agent who doesn't sign up with the redress scheme is a £5,000 fine, and failing to obey the rules carries the risk of being expelled and not being accepted to a scheme in future, whereas if a landlord fails to join their local authority licensing scheme, the penalty is a £20,000 fine and a criminal record, with potential imprisonment if they fall down on any scheme rules.

Am I missing something here....??

Gilly

10:21 AM, 1st October 2014
About 4 years ago

I agree Paul that regulation of Agents is long overdue and it is most welcome - it will be another matter to monitor it I suspect. Most landlords believe that when they hand over the management of their properties to an Agent, that the Agent will then be responsible for them - how wrong could this be? Unless I am mistaken then the landlord is still liable if deposits are not protected or if certs are not in place etc

In Wales, we will ALL be Agents soon, if the proposed legislation is not changed. Any landlord who carries out tasks to do with their property (collecting rent, organising workmen, gas certs etc) will be deemed to be an Agent. Any landlord who manages property for more than one other person (I do for both my daughter and sister, so I will be one) will have to be a Agent and the list goes on.

Good luck to the RLA who are fighting this and hopefully someone will listen. This applies to properties in Wales not just Welsh residents by the way.....

Chris Amis

10:26 AM, 1st October 2014
About 4 years ago

Does this apply to managing agents for leasehold property?

Can you find out who the redress scheme is for an agent who will not talk to you?

Can you raise ongoing disputes, where in the past there has been no point complaining to ARMA?

Romain Garcin

11:28 AM, 1st October 2014
About 4 years ago

I'm not sure that anything putting barriers to entry for lettings agents is necessarily good for their customers, i.e. the landlords.
Are the big guys necessarily better than the small, independent local agents, for example?

Rob Crawford

16:44 PM, 1st October 2014
About 4 years ago

I don't see this as regulation particularly as Redress Scheme Organisations do not have to provide a code of conduct. I accept that members of NALS (who use RICS), ARLA and UKALA have their own codes of conduct, however, an agent who is only registered with a redress scheme (to be compliant with the law) may have no code of conduct. Also I question the use of the word "consumer". Is a tenant or a landlord, who employers an agent and who's main income comes from the letting of his properties, considered a consumer? If not there is no course of redress! I refer to the interpretation of "consumer" used in the recently introduced distance selling regulations.


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